tax. The state sales tax rate, 6.25%, is above the national medium, with localities adding up to 2% (8.25% total). Texas does have a "back to school" sales tax holiday once a year (generally around the first weekend in August) on clothing and footwear under $100. As for Texas's business tax climate, the state ranks 8th in the nation. Property taxes are exclusively collected at the local level in the state, and are generally at rates above the national average. As a whole, Texas is a "tax donor state" with Texans receiving back approximately $0.94 per every dollar of federal income taxes collected in 2005. Tax burden Texas is one of the seven states of the United States with no personal state income tax. In addition, Texas does not allow any lower level of government (counties, cities, etc.) to impose an income tax. This means that, for the residents of Texas, the maximum rate of income taxation is the top rate set by the US Government. Businesses, except for sole proprietorships and partnerships, are subject to a gross margins tax. The state sales tax is set at 6.25 percent. Cities are allowed to impose an additional 1% tax, and additional taxes not to exceed 1% may be approved by voters for any combination of county sales tax, transportation districts, economic development, and/or crime prevention. The average sales tax in Texas amounts to 8.25 percent. The state determines the items subject to sales tax, which all other entities must follow. Motor vehicle sales are subject only to the 6.25% state sales tax. Food, except for prepared food, and non-prescription medicines are among the major items exempt from sales tax. While property taxes are among the highest in the nation, property costs are also among the lowest in the nation. Property taxes constitute the majority of revenue and are collected and kept by local governments, as the Texas Constitution specifically prohibits a state property tax. For real property, counties, cities, and school districts (along with other special districts, such as for a community college or public hospital) can also impose taxes. All property is assessed uniformly throughout the county via the county "appraisal district", and taxes are assessed based on 100% of the property's assessed value. While larger personal property items such as cars, boats, and airplanes can be subject to local taxes as well, it is far less common. Industries Agriculture